Abstract
This study investigates the determinants of revenue in North America’s four main major-level professional sports leagues. Estimates reveal that revenue is positively associated with winning in baseball (MLB), basketball (NBA), and hockey (NHL), but no such relationship is found in football (NFL). In addition, the returns to winning in baseball and hockey are increasing, not diminishing as is commonly assumed, and thus casts doubt on the uncertainty of outcome hypothesis as it is traditionally applied. Differences in the returns to winning are consistent with differences in revenue sharing arrangements across leagues, and the results have several implications for economic models of sports leagues. Results also indicate a strong relationship between stadium age and revenue, which is consistent with observed rapid replacement of sports stadiums. Average income and the presence of multiple teams in a city have differing impacts across leagues.
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